Powerless Consumers Spend More

<p>At the close of 2007, American citizens found themselves with a deepening credit-card debt of $972 billion. Although there might be multiple contributors to such debt, one likely cause is consumers' overspending. Consumers can, and often do, spend $88 for a Lacoste polo shirt when one of comparable quality can be garnered for half the price. And consumers can spend in excess of $300 on a Dualit toaster when $30 will produce one of similar, if not equal, functional value to most consumers. </p> <p>Seasoned marketers and academics recognize that products are often sought for reasons beyond their pure functional qualities; their purchases fulfill a variety of psychological needs. In particular, products are sometimes purchased for their ability to compensate for psychological threats, a process that we call "compensatory consumption." Although our notion that consumer purchases can serve a compensatory function is not new, we have recently unearthed a previously unstudied form � one that is fueled when consumers experience a lack of power or control. </p>